Investors nervous about falling gold prices have yanked more than $5 billion from the largest ETF tracking the precious metal so far this year.
SPDR Gold Shares (NYSEArca: GLD) is down about 6% the past month as futures have dropped below $1,600 an ounce.
The gold ETF has experienced net outflows of $5.4 billion year to date, according to IndexUniverse data.
GLD and other gold ETFs such as iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) saw heavy redemptions in February. [Gold ETFs Drop 100 Metric Tons]
“A record $4.1 billion was pulled from gold ETFs in February, the largest single month of net outflows for the group ever. It’s almost twice the previous high — $2.6 billion in January 2011,” reports Jason Kephart for InvestmentNews.
Some analysts are blaming gold’s recent pullback on automatic spending cuts in the U.S. that are seen reducing inflationary risks.
Continued net redemptions in gold ETFs at this pace pose “the largest downside risk to prices,” Barclays Capital analysts said in a Reuters report.
Meanwhile, Bank of America Merrill Lynch analysts cut their price forecasts on gold this week, citing higher U.S. nominal interest rates and improving economic conditions that raise doubts over the metal’s safe-haven appeal, MarketWatch reports.